Indonesia: Jangled nerves and the begging bowl

As the global financial crisis broke one of the countries where ordinary people especially held their breath was Indonesia.

Ravaged by the economic crisis of 1997-8, whole sectors of the economy were brought down and many millions were thrown below the poverty line.

In recent weeks, as the Jakarta stock exchange was shut for several days after falling by 22 percent, the tremors of anticipation could again be felt.

The first major casualty was Bakrie & Brothers, the country’s largest and most powerful conglomerate. The firm, which belongs to the minister for people’s welfare, was forced to suspend trading.

Inflation is currently running at around 12 percent. And, after a collapse in the value of the currency, the country only has sufficient foreign reserves for four and a half months.

Fuel price rises, resulting from the government’s decision to slash subsidies, have impacted on the living standards of millions. Public transport costs have shot up, while fishermen find it difficult to put out to sea.

The result is plunge in incomes for working families in the port cities.

Data from the Indonesian Institute of Sciences shows that the number of poor Indonesians will rise to 41.1 million next month, an increase of 4.7 million from 2007.

As yet there has been no concerted response from the Indonesian working class whose highly fragmented labour movement has yet to emerge fully from the years of dictatorship.

This does not mean it will not come – especially as the new year will see overseas demand for textile and footwear products drop, and lay-offs of workers are threatened.

The ruling class is nervous. A recent headline in the Jakarta Post newspaper read, “Real Sector Teeters On The Edge of Collapse” – a reference to the way the crisis is spreading beyond the financial sector.

The Indonesian Chamber of Commerce and Industry has responded to the recession by following the lead of its US and British counterparts – pushing a begging bowl under the noses of the government in order to “help cushion the real sector from the impact of the global economic slowdown”.

Erstwhile opponents of public spending are now raiding the treasury. Meanwhile, the same time the captains of industry plead for capping of proposed increases in the minimum wage.

David Jardine is the author of Foreign Fields Forever: Britain’s Forgotten War In Indonesia 1945-46, which is available from djardine72@yahoo.co.uk or from Bookmarks, the socialist bookshop, 1 Bloomsbury Street, London WC1B 3QE Phone 020 7637 1848 or go to » www.bookmarksbookshop.co.uk